Marking Schedule E, line 28 (e) for basis computation in ProConnect Tax

This article will help with reporting for individual Schedule E (Form 1040), Supplemental Income and Loss, Page 2, Part II, Line 28 (e): Check if basis computation is required.

This box should be selected if you report a loss, receive a distribution, dispose of stock, or receive a loan repayment from an S corporation along with an attachment showing the required basis computation.

Reporting a loss:

This will be selected automatically when a loss is reported.

Receive a distribution:

This will be selected when distributions are entered as follows:

1. Go to Input Return ⮕ Income ⮕ Passthrough K-1s ⮕ S-Corp Info (1120-S K-1)
2. Select the Lines 11-17 tab.
3. Select Line 16 - Items Affecting Shareholder Basis.
4. Enter amounts in the field (16D) Distributions.

Dispose of stock:

To select this box when reporting a disposition of stock, follow these steps:

1. Go to Input Return ⮕ Income ⮕ Dispositions (Sch D, etc.)
2. Select Schedule D, 4797, etc.) from the top left menu panel.
3. Enter the applicable information in the subsection Dispositions (Schedule D, 4797, etc.).
   • Required entries include Date acquired, Date sold and Sales price.
4. Scroll down to Corresponding Activity Information - Passive (8582) / At-Risk (6198) / Investment Tax (8960) / Qualified Business Income (QBI).
5. In the field Form number of related activity select Schedule E (S corporation) from the dropdown menu.
6. In the field Activity name or number select the applicable S Corp passthrough activity for this disposition.
7. Scroll down to the next section Disposition of Partnership Interest or S Corporation Stock (8960).
8. Select the box Disposition of partnership interest or S corporation stock (8960).

Receipt of loan repayment:

This will be selected when an amount is entered as follows:

1. Go to Input Return ⮕ Income ⮕ Passthrough K-1s ⮕ S-Corp Info (1120-S K-1)
2. Select the Lines 11-17 tab.
3. Select Line 16 - Items Affecting Shareholder Basis.
4. Enter amounts in the field (16E) Repayment of loans from shareholder.

For help generating Form 7203:

See How to complete Form 7203 in ProConnect for a step-by-step guide to completing the basis limitation and shareholder debt information.